Cannabis for Sleep: The Growing Trend Among Young Adults

The growing acceptance and legalization of cannabis have led to a significant shift in consumer behavior, particularly among young adults seeking natural wellness alternatives. This trend is creating a new, lucrative segment within the cannabis industry focused on sleep aids. As the market evolves past its initial growth phase, characterized by broad recreational use, it is now entering a more sophisticated stage where targeted therapeutic applications, such as addressing sleep disorders, are driving product innovation and investment. This specialization is not just a passing trend but a foundational shift, contributing billions to the broader wellness economy and signaling a mature market ready for strategic consolidation.

Recent market data reveals a notable upsurge in capital flowing toward cannabis-based sleep solutions, with consumer spending in this category projected to grow significantly. In 2023, the global cannabis sleep aid market was valued at approximately $2.3 billion, with projections indicating it could reach $6.1 billion by 2030. This growth is underpinned by a clear consumer preference for cannabis over traditional sleep medications, especially among millennials and Gen Z. Continue reading to understand the key market dynamics, major players, and future implications of the cannabis for sleep trend among young adults.

The State of Cannabis for Sleep in 2024

The market for cannabis-based sleep aids is experiencing robust growth, distinguished by high consumer demand and increasing product diversification. In 2023, sales of cannabis products marketed for sleep, such as edibles, tinctures, and specialized vapes, saw a 25% year-over-year increase. This outpaced the growth of the general cannabis market, which grew by approximately 15% in the same period. This highlights the young adult cannabis sleep aid trend as a powerful market driver. Projections for 2024–2028 forecast a compound annual growth rate (CAGR) of 16% for this segment. The market is shifting from a focus on high-THC products to a more nuanced approach, emphasizing formulations with CBN (cannabinol) and CBD, which are perceived as more effective and less psychoactive for sleep.

Primary Drivers and Objectives of Market Activity

The rapid expansion of the cannabis sleep aid market is propelled by several strategic drivers. These factors are shaping how companies are positioning themselves to capture the growing demand from young adults.

1. Product Innovation and Formulation: The primary objective is to develop scientifically-backed formulations that specifically target sleep. Companies are investing heavily in R&D to create products combining cannabinoids like CBN and CBD with other natural sleep aids such as melatonin and L-theanine. This focus on specialized products allows brands to differentiate themselves in a crowded market and command premium pricing. The goal is to move beyond generic cannabis products and offer solutions that consumers trust for specific wellness needs, like addressing marijuana use for insomnia in youth.

2. Regulatory Compliance and Market Access: Navigating the complex and evolving regulatory landscape is a critical driver. As more states and countries legalize cannabis for medical and recreational use, companies are prioritizing compliance to gain access to new markets. The objective is to secure the necessary licenses and approvals to launch sleep-focused products, which often requires meeting stricter testing and labeling standards than general recreational products. This strategic focus ensures long-term viability and reduces the risk of legal challenges.

3. Building Brand Trust and Consumer Education: With a young and often inexperienced consumer base, building brand trust is paramount. The key objective is to educate consumers on the benefits and responsible use of cannabis for sleep. This is achieved through transparent marketing, clear dosage instructions, and third-party lab testing results. Brands that successfully position themselves as authoritative and trustworthy sources of information are more likely to build a loyal customer base and capture a larger market share.

Analysis of Key Market Developments

Several key deals and product launches highlight the strategic importance of the cannabis for sleep segment.

• Curaleaf's "Zero Proof" Line (2023): Curaleaf launched its "Zero Proof" brand, featuring low-dose THC and high-CBD/CBN seltzers and tinctures. This move was a direct response to the "canna-curious" young adult demographic seeking non-alcoholic, wellness-oriented alternatives. The strategic significance lies in capturing a new consumer segment that is less interested in high-potency products and more focused on controlled, predictable effects for relaxation and sleep.

• Canopy Growth's Partnership with Martha Stewart (Ongoing): Canopy Growth's collaboration with Martha Stewart on a line of CBD and CBN gummies, including a "Sleep" formulation, has been highly successful. Valued as a multi-million dollar partnership, it leverages Stewart’s credibility in the wellness and lifestyle space to appeal to a mainstream audience, including young adults. The deal’s significance is its ability to destigmatize cannabis use and position it as a legitimate wellness product.

• Kiva Confections' "Camino" Sleep Gummies (Ongoing): Kiva Confections has seen immense success with its "Camino" brand of gummies, particularly the "Midnight Blueberry" flavor, which combines THC, CBN, and terpenes for a sleep-inducing effect. With Kiva's valuation in the hundreds of millions, this product line represents a significant portion of their revenue. The strategic importance is their mastery of flavor and formulation, creating a highly desirable product that commands brand loyalty among young consumers.

• Wana Brands' Acquisition by Canopy Growth (2021, Deal Finalized 2024): Canopy Growth’s acquisition of Wana Brands, North America's leading edibles company, for $297.5 million upfront, is a landmark deal. Wana’s product portfolio includes several sleep-focused SKUs. This acquisition gives Canopy a dominant position in the edibles market and access to Wana's proven product formulations and distribution network, signaling a clear focus on high-margin, branded consumer goods.

What These Developments Signal for the Future Landscape

The strategic moves within the cannabis for sleep market indicate several overarching trends that will define the industry's future.

• Shift From Commoditization to Branded Goods: The focus is moving away from selling cannabis as a raw commodity toward creating trusted, branded consumer packaged goods (CPG). Companies are investing in brand identity, formulation, and marketing to build loyalty.

• Focus on Minor Cannabinoids: There is a clear market signal that "minor" cannabinoids like CBN are becoming major players. The trend of marijuana use for insomnia in youth is driving R&D into the specific effects of these compounds, leading to more sophisticated and effective products.

• Mainstream Retail and Distribution: The success of celebrity partnerships and approachable product formats (like gummies and beverages) signals a move toward mainstream acceptance. Expect to see these products gain access to more traditional retail channels as regulations permit.

• Data-Driven Product Development: Companies are increasingly using consumer data to inform product development. Feedback on efficacy, flavor, and format is being used to refine existing products and create new ones that meet the specific demands of the young adult cannabis sleep aid trend.

Future Outlook and Stakeholder Implications

The trajectory for the cannabis sleep aid market is set for continued growth, driven by ongoing legalization, product innovation, and increasing consumer acceptance. For stakeholders, the implications are clear. Investors should look for companies with strong brands, proven product formulations, and a clear strategy for navigating the regulatory environment. Regulators will face increasing pressure to create clear guidelines for cannabinoid-based wellness products. Finally, consumers will benefit from a wider array of safe, effective, and sophisticated products tailored to their wellness needs.

Future implications for stakeholders in the cannabis for sleep market focus on brand differentiation, regulatory navigation, and supply chain integrity. Subscribe to our newsletter to get detailed insights on the cannabis industry and future trends to place your business on the road to success.